Earnings call transcript: BuildDirect Q1 2025 sees revenue dip, margin up

BuildDirect.com Technologies Inc. (market cap: $5.36 million) reported a mixed financial performance for the first quarter of 2025, with a slight decrease in revenue but improvements in gross margin and adjusted EBITDA. The company’s revenue reached $15.1 million, marking a 3.2% decline from the previous year, while its gross margin increased to 41.3%. The stock remained stable following the earnings release, trading at $26.78, near its 52-week high of $28.33. According to InvestingPro, the stock has delivered an impressive 12.11% return year-to-date.

Key Takeaways

• Revenue decreased by 3.2% year-over-year due to adverse weather conditions.
• Gross margin improved to 41.3%, up from 39.1% in Q1 2024.
• Adjusted EBITDA rose to $650,000, reflecting operational improvements.
• Significant acquisition and strategic agreements were completed.
• No specific financial guidance was provided for upcoming quarters.

Company Performance

BuildDirect’s Q1 2025 results indicate a mixed performance with a decline in revenue but improvements in profitability metrics. The company attributed the revenue dip to challenging weather conditions in Michigan, impacting its operations. Despite this, BuildDirect managed to enhance its gross margin and adjusted EBITDA, showcasing effective cost management and operational efficiencies.

Financial Highlights

• Revenue: $15.1 million (3.2% decrease from Q1 2024)
• Gross Profit: $6.2 million (2.2% increase)
• Gross Margin: 41.3% (up from 39.1% in Q1 2024)
• Adjusted EBITDA: $650,000 (up from $500,000 in Q1 2024)

Outlook & Guidance

While BuildDirect did not provide specific financial guidance for the upcoming quarters, the company aims to acquire $15-20 million in revenue through mergers and acquisitions in 2025. The focus remains on expanding the ProCenter network and improving gross margins and operating expenses. InvestingPro analysis reveals several key insights about the company’s valuation, including its high EBITDA multiple and Price/Book ratio. Subscribers can access 6 additional exclusive ProTips and comprehensive financial metrics to make more informed investment decisions.

Executive Commentary

CEO Sean Wilson emphasized the company’s strategic focus on converting underutilized locations into profitable ProCenters, stating, "We focus on underutilized or underperforming locations that could be quickly converted into pro centers." He also highlighted the company’s commitment to scaling its network to meet the evolving needs of professional customers.

Risks and Challenges

• Weather-related disruptions could continue to impact revenue.
• Integration of acquisitions poses operational challenges.
• Market fragmentation with over 12,000 independent operators presents competitive pressures.
• Economic uncertainties may affect consumer spending in the home improvement sector.

Q&A

During the earnings call, analysts inquired about BuildDirect’s M&A strategy, particularly the rationale behind the recent acquisition in Florida. The company explained its focus on acquiring established locations with existing teams to ensure a quick path to positive EBITDA. Additionally, the transition from third-party logistics was discussed, highlighting its potential to reduce costs and improve efficiency.

Full transcript - Builddirect.com Tehcnologies Inc (BILD) Q1 2025:

Bob Chan, Moderator, BuildDirect: All right. Let’s begin. Hello, everyone. Welcome to BuildDirect’s Q1 twenty twenty five Financial Results Conference Call.

For those who are unfamiliar, BILD direct trades on the TXXV under the ticker BILD. That’s B I L D, BILD. My name is Bob Chan, and I’ll be the moderator for today’s call. Before we begin, I’d like to note that some of the comments today will contain forward looking information and statements under applicable securities law that reflect management’s current views with respect to future events. Any such information and statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those projected in the forward looking information and statements.

Please refer to the various materials the company has filed with the Canadian securities regulators for a broader description of operational and risk factors that could affect the company affect the company’s performance. In addition, please note that all dollar amounts mentioned in the presentation are in US dollars unless otherwise stated. Here’s a disclaimer, in case if anybody wants to take a screenshot. So on today’s call, we’ll be covering BuildDirect’s q one twenty twenty five financial and operational highlights as well as growth outlook for the remainder of 2025. Following comments from BuildDirect management, the call will be open for questions.

Questions can be sent using the Zoom q and a function at the bottom of your screen. If you’re calling in to listen to this webinar, please email your questions directly to irbuilddirect dot com. Our presenters today will be the CEO of BuildDirect, Sean Wilson and CFO of BuildDirect, Carey Biggs. I’ll now turn the conference call over to Sean.

Sean Wilson, CEO, BuildDirect: All right. Great. Thanks, Bob. And for those joining the first time, welcome, to, to our story. Bill Direct is a leading North American flooring retailer, and we’re expanding our footprint through a combination of organic and also, m and a of brick and mortar locations.

Our strategy is focused on consolidating a highly fragmented $90,000,000,000 flooring industry while also building a platform that supports future product expansion and entry into adjacent home improvement categories, ultimately targeting a total addressable market of over 200,000,000,000. Before I hand it over to Carrie for a detailed look at the financials, a few top one highlights from q one. For the three months ended 03/31/2025, we generated, 15,100,000.0 in revenue with a gross margin of 41.3%. Adjusted EBITDA came in approximately at 650,000, reflecting continued progress on both growth and operational efficiency. And with that, I’ll turn it over to Carrie to walk through the financials, in more detail.

Carey Biggs, CFO, BuildDirect: Okay. Thank you. Thank you, Sean. Think we’re on slide 11 now, Bob. Great.

Okay. So, looking at, the Q1 twenty twenty five financial performance, again, that’s three months ended 03/31/2025. The key highlights are summarized here on Slide 11, which I’ll quickly go through now, and I’ll provide further context and details on these shortly. So revenue, as Sean noted, was 15,100,000.0 for the quarter compared to 15,600,000.0 in the same quarter last year, so Q1 of twenty twenty four. Gross profit was $6,200,000 with a 41.3% gross margin for Q1 twenty twenty five compared to 6,100,000.0 and a 39.1 percent gross margin in the same quarter last year.

So again, q one of twenty twenty four. So that’s an increase of a hundred thousand or so of gross profit. OpEx, operating expenses were $66,400,000.0 for the quarter, a slight decrease year over year as compared to q one twenty four. And adjusted EBITDA, as noted, was approximately 650,000 for the three months ended 03/31/2025 compared to just over 500,000 in the same quarter last year. Working capital was 2 and a half million, at 03/31/2025 compared to 2,700,000.0, in the prior year, down slightly around 200,000.

So on to slide 12, which will outline quarterly income statement trends. Again, I’ll focus on q one twenty five with comparisons to the same period prior year Q1 of twenty twenty four. Revenue was $15,100,000 compared to $15,600,000 so a decrease of around $500,000 or 3.2%. If we break that down by segment, revenue in q one for the BuildDirect e comm segment was 4,200,000.0 for q one twenty five compared to the 4,300,000.0 for the same period the prior year. So a slight decrease of around 44,000 or 1%.

Q one twenty five revenue for the ProCenters, was 10,800,000.0 compared to 11,300,000.0 for the same period in the prior year, so a decrease of 450,000 or 4%. Sales overall for the period were negatively impacted by some adverse weather conditions in some of our key markets in Michigan earlier in January and February, which reduced customer traffic and delayed some project timelines. On to gross profit, as I noted, strong gross profit in the face of the slightly lower sales. We had 6,200,000.0 gross profit, compared to 6,100,000.0 in the same period prior year. So an increase of a 33,000 or 2.2%.

Increases mainly attributable to sales of higher margin core inventory across our businesses. Given this, gross profit percent increased two twenty basis points to 41.3 in Q1 of twenty five versus Q1 of twenty four. Onto OpEx, operating expenses in q one twenty twenty five decreased 28,000 to 6,400,000.0 in q one of twenty five, so fairly consistent with q one of twenty twenty four. Fulfillment costs, in q one decreased a hundred and 2 thousand or, just over 10% to nearly 900,000, from 1,000,000 in q one of twenty twenty four. The decrease is attributed to slightly lower ecommerce revenues in q one of twenty five and some negotiated cost savings with key fulfillment vendors versus the prior period.

Selling and marketing costs were approximately 1,400,000.0 in q one of twenty five, increase slight increase of 53,000 or 3.9% versus q one of twenty twenty four. And finally, admin costs in q one of twenty twenty five increased nominally by point 3% to 3,200,000.0. The company completed certain cost cutting initiatives, I think, which were press released earlier in, the year in q one of twenty five, which, will support operational cost savings moving forward, which should positively impact, admin costs. Moving to other income and expense on the income statement, probably just point out the key highlights. In q one of twenty five, interest expense increased nominally 19,000 to 349,000 compared to 330,000 in q one of twenty four.

Increases related primarily to the higher accrued balances on the insider loans and some incremental interest on our new Royal Bank revolving credit facility. I’ll also point out on the income statement a fair value warrant adjustment. So the fair value of our warrant liability on the company’s balance sheet increased to a hundred and 90 5 thousand as at 03/31/2025. So this resulted in a a fair value loss on the income statement of a hundred and 30 1 thousand in q one of twenty five, which compared to a fair value gain of 3,000 in the same period the prior year. Again, I’ll note that this is a noncash loss and reflects an accounting expense only driven by the company’s higher share price quarter over quarter.

Company also incurred restructuring costs, which you’ll see on the P and L of approximately $120,000 in Q1 of twenty five, and this was compared to nil, no restructuring costs in the same period the prior quarter. These costs relate primarily to severance related to some of our headcount reductions that were realized in Q1. On the adjusted EBITDA side, Sean noted earlier, we achieved another positive quarter of adjusted EBITDA in Q1 reporting $650,000 up nearly $150,000 from the prior quarter, reflecting strong gross margins, as I’ve noted, as well add back of certain one time nonrecurring restructuring costs. Moving on to the balance sheet, I’ll quickly summarize here. You know, we are in a strong position still as at 03/31/2025.

Looking into the total asset number, within that is our current assets, which can consisted primarily of cash, receivables, inventory, and prepaids, and that totaled 16,600,000.0 as at 03/31/2025. Our current liabilities, which, primarily consist of AP, accrued liabilities, deferred revenue, current portion of lease liabilities and loan and prom notes payable totaled approximately 14,000,000. I will note of that $14,000,000 current liabilities, 2,400,000.0 relates to debt outstanding from our bank line of credit. This facility is classified as current debt for accounting purposes as it’s a demand loan. Practically speaking though, this loan is not due within twelve months as we expect our tier one bank partner, Royal Bank, will not require repayment within the next year.

So this gives us a 1.2 times current ratio as at March 31 as our current assets, exceed our current liabilities by approximately two and a half million. And as I’ve noted, this $2,500,000 is referred to as working capital, as I’ve noted on the slide. Cash position at March 31 was $3,500,000 so $1,200,000 higher than the prior quarter year over year. Next slide, I’ll quickly discuss the cash flow statement. On the operating activity side for the three months ended 03/31/2025, total cash from operations provided was $7,768,000 compared to 1,200,000.0 in the prior period q one of twenty four.

So a decrease of 400,000 year over year. The decrease is mainly attributable to noncash working capital. Noncash working capital contributed 313,000 positive cash in q one of twenty five compared to 665,000 positive in q one of twenty four. So that is the majority of the $400,000 decrease year over year. On the investing activity side, for the three months ended March 31, cash from investing activities used a hundred and $1,000 compared to 41,000 positive cash in the prior period q one of twenty four, net decrease of a hundred and 42,000.

The decrease is attributed to higher purchases of PP and E, a hundred and 1,000 versus 29,000 in the prior period. Those were pro center CapEx and capital additions and less cash received under certain subleases, which matured in 2024. We are no longer collecting sublease income as those subleases matured in ’24. On the financing activity side, cash provided by financing activities was 476,000 compared to 1,700,000 used in the prior period Q1 of twenty four. So this is a $2,100,000 difference, primarily related to advances on the company’s credit facility in Q1 twenty five was $1,200,000 compared to nil the prior period.

Majority of that was used to fund the assets of the Florida Pro Center. Deferred consideration repayment was $675,000 in the prior period compared to nil in the current period. And loan repayments also impacted the financing activities year over year. This concludes my overview of the financials. I will say as we look into the future, our focus remains on strengthening profitability across all areas of the business, including continuing to realize savings on newly launched cost reduction initiatives and maintaining strict cost control.

We are prior to prioritizing growth through the expansion of our physical store network that Sean will talk about, accelerating our high margin ecommerce operations where feasible, and pursuing operational efficiencies that will drive sustainable growth and create long term value for her for our shareholders. I’ll turn the call back over to Sean. Over to you. Thank you.

Sean Wilson, CEO, BuildDirect: Great. Thanks, Gary. I want to share an update on a few operational highlights. We made, great progress in Q1. First off, on the ProCenter expansion side, in March, we completed the acquisition of key assets from Anchor York Shore Flooring, a well established distributor in Orlando, Florida.

The 593,000, USD transaction expanded our footprint in Southeast US. It’s a strategically important growth region for us, for sure. We’ll provide more more detail here in a in a bit. In addition, we opened up a new Pro Center in Southern California, and we transitioned out of a third party logistics provider to our own fully owned and operated, facility. The shift enhances our direct to pro service and strengthens our presence, also but in the in the West Coast.

And lastly, we advanced several operational streamlining initiatives designed to improve, organizational efficiency and our cost structure. These were, expected to generate approximately $900,000 annualized in savings as we’ve, mentioned previously. Okay. Turning to subsequent events. After the first quarter, we executed two initiatives.

First off, on April 23, we signed a supply agreement worth up to 200,000,000 USD with a North America customer, a large one in the sports entertainment and rec sector. A high performance flooring will be used, in their facilities, reinforcing our position in high spec, commercial applications. Our model is a great fit for, customers in their home projects, and also pros in their very large projects. It’s good, good to see. You know, we also completed a loan, secured loan with their growth partners, a long term insider, for our senior management team on a share purchase, which we’re pretty, pretty excited about.

Okay. Moving on to, you know, to m and a. So let me first briefly walk through our framework behind our strategy. We focus on underutilized or underperforming locations that could be quickly converted into pro centers. These are high ROI opportunities, generate meaningful returns, with minimal disruption.

We also emphasize validated book value, ensuring that inventory and assets can be independently verified, by us. This helps protect downside risk and gives us confidence in the in the numbers. From there, we assess the upside. We target businesses with a clear and achievable path to positive EBITDA, but more so payback on the investment in twelve to twenty four months using a conservative op operations based, plan. Alignment’s important, and we prioritize targets that expand our geographic footprint.

In some cases, increase density, but overall, enhancing logistics, from our, you for our network. We focus on synergy ready businesses where we can, quickly apply our centralized procurement, marketing, and distribution capabilities to drive margin improvement, and also, of course, improve, customer service. And together, this framework ensures that each acquisition will be, accretive, low risk, and aligned with the long term platform that we are that we’re building. Okay. So as noted, on the acquisition of Anther Yorkshire, it was valued at 598,000, approximately one x EBITDA.

It’s a good, you know, great acquisition for our, our footprint. So with with this kind of acquisition, we gained established relationships, local builders, contractors, and opening inventory footprint, and also, more importantly, proven operational expertise with the with the team. The revenue they reported on audit was, 5,800,000.0 and EBITDA of around 661, which is a good, good starting point. And then this way aligns our strategy for, improving penetration in the in the Southeast. As we look ahead in 2025, our focus remains on, disciplined expansion, specifically through the continued growth of our pro center network.

And we’re committed to scaling this network across key regions and strengthening consistently meet the evolving needs of our pro customers, and really, you know, focus on driving EBITDA along with it by optimizing operations. You know, things like, gross margin improvement and operating expense management is gonna be important for us, you know, really through this, entire entire journey. So with that, I’ll turn the call back over to Bob to begin the q and a session.

Bob Chan, Moderator, BuildDirect: Thank you, Sean. Thank you, Sean. We’ll now begin the q and a session. As a reminder, questions can be submitted using the Zoom q and a function at the bottom of your screen. If you’re calling in to listen to the webinar, please email your questions directly to ir@builddirect.com.

So first question we have here is could you provide more detail on the timeline for the planned new pro center openings in the in key US markets?

Sean Wilson, CEO, BuildDirect: So I would say on the on the build side, we have a couple couple in mind, potentially. On the buy side, as I mentioned before, these kind of things, you know, they happen when they happen. We’re thrilled if we acquired, you know, 15 or 20,000,000 in revenue this, this year with Anchor, Yorkshire that, took out about six. And so from a timing perspective, I would say, you know, look look for the balance of that. You know, ideally, you know, for us, you know, for us in in q three would be ideal, for integration in q four, but we also don’t force the deals.

They have to make sense and and, be done in the right kinda the right way. So I would say, you know, for those kinda watching our pipeline, pipeline’s healthy, looking for I mean, sorry. Really not looking for, you know, too many new ones to, to add, but but with that, it has to be the right the right structure. So, nothing more to add on that one.

Bob Chan, Moderator, BuildDirect: Now second question is given your dual strategy of building new pro centers organically and acquiring existing flooring retailers, could you elaborate on why BuildDirect often prefers to acquire established locations?

Sean Wilson, CEO, BuildDirect: Yeah. It’s a lot easier, a lot faster payback. You you get into a market with an established team. That’s really the most important part. Like, on our pipeline, for example, we look for businesses that are not being operated by the the, the owners ideally because, you know, then post post transaction, you have an operational challenge.

And so, you really, it’s having a team in place that’s already, you know, used to operating. They have relationships. Those those are staying with the with the business, and we’re able to quickly plug in, procurement and marketing synergies for, you know, really rapid, improvement. We’ve seen that, for example, with, Anchor York store. It’s been it’s been fantastic.

Great team, very committed, great relationships, and they’re able to take our product offerings and marketing services and and really run with it. So I would say that’s, you know, kinda first and foremost. And we’ve mentioned before, it’s a massive industry, over 12,000 independent operators, highly fragmented, no shortage at all of, of targets, you know, out there for for a good fit. But here, again, it has to be the right kinda deal, right structure, right area, for us to prioritize a specific, opportunity.

Bob Chan, Moderator, BuildDirect: Now next question will be on the the the recent acquisition in Florida, which was done at approximately one times EBITDA. Can you discuss how you plan to integrate these assets operationally and commercially, as well as what synergies do you expect to realize and on what timeline?

Sean Wilson, CEO, BuildDirect: Yes. This one goes both ways. Anchor York store is a really interesting business. They had, they have a, a really strong presence in the Southeast, but also in some large contract sectors, like, around, like, the medical field that, and hospitality that we are, as a broader group, we are a bit weaker in. And so there’s some interesting synergies there going both ways.

On the, integration, that’s that was pretty fast. It’s already already done. Pretty good, pretty good process and team and structure there. And so at this point now, it’s just a matter, you know, as far as our current current road map where we’re, loading out the extra you know, the, incremental products that that they don’t sell today. So inventory is there.

Samples are are, being loaded in. They’ll go out to their customers, and then it’s a rolling kinda rolling change. And so, I’ll look to to see improvements in that business really in q three, q ’4, keep on, going from there. And then as mentioned before, potentially, there’s also some some synergies that could flow back, you know, penetrating into just new segments for us, which we’ve, we’ve seen and been participating in some line reviews for, which has been been been been, been great.

Bob Chan, Moderator, BuildDirect: And, next question here is, given the expansion into the Southeast, Eastern US, how does this acquisition fit into your overall regional growth strategy?

Sean Wilson, CEO, BuildDirect: Yeah. So, we definitely know, we prefer opening up ProCenters in markets that are intuitively growing. So Southeast, Sunbelt, a good example of that. And for our ecommerce business, we had a pretty good, you know, pretty good foothold in the Southeast. And so, we had a substantial freight savings from, acquiring that business and then being able to ship out of there, which is great.

And then, you know, really along with that also opens up, you know, nearby states, you know, going to Texas, so on and so forth. So, it’s a good, entry point. It won’t be the only location in Florida. It’s just the first one. And then in the Southeast, but, you know, those comments kind of kinda hold.

So building out a bigger, base of the of pro centers throughout the South, Southeast is definitely a a priority.

Bob Chan, Moderator, BuildDirect: Bill Derek has been reducing reliance on third party warehouses in favor of pro centers. How is this transition progressing, and what impact has it had on fulfillment costs and customer delivery times?

Sean Wilson, CEO, BuildDirect: Yeah. So this one’s a this one’s a pretty big deal. So it’s done. First off, we don’t use 3PLs any any longer. In some cases, we offer 3PL services, which is kind of interesting, you know, flip of flip of of narrative there.

And so, yeah, we’re we’re we’re out of that out of that that, that that altogether. It’s brought down fulfillment costs remarkably. And so we think about a three PL. You know, these giant warehouses, you know, they’re set up for light products. You know?

Think of, like, shoes or other things you can ship on Amazon kind of thing, and they’re very cost ineffective. So, like, they’re, you know, very often get into a a spot where you can reverse scale. The cost perspective, if you have slow moving inventory, you just rack up the cost like crazy. And then on the fulfillment side, it’s not it’s not great. So customer, service has definitely gone up quite a bit as we’ve gotten out of those, you know, next you know, our claim rate’s super low on shipping now, things like that.

But then just the sheer, you know, fulfillment cost over the the past couple years has come down progressively, really from from getting out of those, facilities, which is now which is now done.

Bob Chan, Moderator, BuildDirect: Can you elaborate on the recent management loans secured by senior leadership? How do these loans align with the company’s incentive structure and shareholder interests?

Sean Wilson, CEO, BuildDirect: Simply stated, the management team owns a lot more equity. That aligns the interest. Okay.

Carey Biggs, CFO, BuildDirect: I can can maybe just comment just from the the debt side perspective. You know? So Lear alone billed direct 775,000, so an insider. And those funds were lent to senior executives to purchase shares in a private transaction. So from a company’s perspective, you know, Bill has a loan payable to Lira and a loan receivable from management.

So from a company’s perspective, net net, there’s no incremental leverage. Mhmm. But, again, as Sean said, you know, management now owns a larger portion of the company. So, you know, we’re sharing risk and reward of share ownership, which I think aligns with with everyone who are also shareholders. So

Bob Chan, Moderator, BuildDirect: Sounds good. And, now a few questions on the, the market opportunity here. So the the 90 plus billion flooring market is largely fragmented. What are your plans to deepen penetration in the commercial segment? And how does this segment’s margin profile compare with your, residential business?

Sean Wilson, CEO, BuildDirect: So on the commercial, I’m assuming, you’re referring to, like, large projects, you know, condo renovations, you know, kind of kind of things like things like that. So I would say, we’re we’re in that space today. Like I mentioned with the Anchor acquisition, we got a bit deeper into kind of subsegments with that. And it’s interesting, like, when it’s when it’s like the, there’s a acquisition that Lowe’s did recently, for Artison Design Group. It was a pretty big roll up in the industry, pretty much focused on builder and commercial, but fully installed.

The margins are a lot lower, a lot, lot lower. The side of business that we’re more focused on is just the the product fulfillment, where we direct source from factories and, send them sent straight to those projects, and the margins are fantastic. They’re really good. Now on the installation of that, like, the general contractor typically taking care of the, the work, the margins aren’t great for installing, but that’s not that’s not you know, that’s a a huge advantage, I think, for us. So, yeah, we’re definitely very much, geared towards and while we announced the, the large contract we won recently, it’s just got quite a few of them, but that was a good one to, good one to put out there.

And so, yeah, that’s definitely something that we’re doing more and more of, have a good expertise around it. And because we’re able to go straight from factory to, you know, the essentially, the the, the project site, the margins are are very are very healthy.

Bob Chan, Moderator, BuildDirect: Now a question here, from the audience. Will you be releasing guidance for 2025? Can you speak, to seasonality?

Sean Wilson, CEO, BuildDirect: Yeah. No. Guidance, no. Yeah. So don’t don’t provide guidance.

And that’s mainly around the, like, the m and a strategy we have. And so and I said this quite a few times. Like, we’re interested in in an in an insanely accretive deals. That that’s what drives, like, everything. Like, we, take capital allocation, very, very seriously.

And when you look at at the business and you look at you know, perhaps, like, if you’re, you know, checking out a few different examples and you use the, the artisan design group as an example of, a Flooring roll up that was done a while back in a similar in a in a different but but probably close enough close enough, segment. You could see how, you know, how, these businesses are valued, like, very reasonably, and there’s a tremendous amount of upside even where we’re sitting today, which is which is great. But then with that, like, doing deals that are that are highly accretive. Like so, you know, for me, that means the the company takes, you know, ideally, two you know, double digit arbitrage on the deal plus fast payback. And so with that kind of strategy, you know, it’s all about, you know, timing and when those those things hit.

I have been pretty good, though, I think, about about saying, like, what success looks like for, you know, those deals, you know, yearly when it comes to, you know, much more than that. I would say, look. I’d be thrilled if we acquired 15 to $20,000,000 in those models I’ve mentioned before this year. Take that number, subtract out. We’ve already done the 6,000,000 annualized.

That leaves the, that leaves the balance. And so that’s how I would look at it. Look at that. Bob, what was the second part of the question, or did I answer it all?

Bob Chan, Moderator, BuildDirect: It was, what is the the sort of a can you sorry. Can you speak to seasonality?

Sean Wilson, CEO, BuildDirect: Yeah. Oh, seasonality? Yeah. So, for the most part for the most part, you know, the back half of q four and q one is a bit softer for us. And so if you look at the at the full year and just sign equal equal weights, quarter to quarter, you could probably discount 20% and put it into q two through q three.

The so, like, this year, we had we get you know, because we have a large presence in in Michigan, specifically Michigan, which we’re continuing to diversify around, that was really, you know, two things this year in q one. ’1, the weather was terrible. Like, you can just, you know, chat GPT it. It was pretty bad. Very, very bad.

And then second, we also had a lot of fun, you know, noise around the auto industry and, all the, you know, all the stuff that happened, with the the macro side as well, and that hit a few areas a bit a bit harder. Thankfully, that’s unwound, and, it’s gotten better. But I would say that’s the one thing I would say. So as you, look at our business, that’s that comment around seasonality wouldn’t be like that in other markets, like in the Southeast or, you know, Southwest. You don’t really have, like, weather patterns.

Seasonality is very, very mild. And so, you know, for us, right now, because we have a large concentration in Michigan, you know, one, for example, got hit with those two those two things, but but, otherwise, it’s relatively relatively smooth.

Bob Chan, Moderator, BuildDirect: Perfect. That that’s all the questions we have, for today. If you haven’t addressed your question during the call, please feel free to submit your questions, directly to IR at, build direct dot com. Thank you, Sean. And before we end the conference call, do you have any closing comments that you would like to share with our audience?

Sean Wilson, CEO, BuildDirect: No. Thanks for joining. Keep following the story. Really appreciate it, and, reach out anytime. Thanks, guys.

Take care.

Bob Chan, Moderator, BuildDirect: Alright. Thank you, Sean and Carrie. Just as a reminder to those who aren’t familiar with BuildDirect, the company trades on the TXV under a ticker BILD. That’s BILD. The recording of today’s conference call will be uploaded onto BuildDirect’s investor relations website.

And and, like I said earlier, if you have any additional questions that were not addressed during the call, please send them to IRR build direct dot com. Now I’d like to thank everyone for joining us today. Take care.

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